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Gleason to Raise Water & Sewer Rates 33%

Shannon Taylor

Editor

Nate Fontenot with the TN State Comptroller’s Office who serves as staff to the Tennessee Board of Utility Regulation as West Tennessee’s Utility Analyst spoke to the board of mayor and alderman regarding the resolution to raise the city’s sewer and water rates.

After months of hesitation on raising water and sewer rates, the Gleason board of Mayor and Alderman voted to raise the water and sewer rates by 33% on Monday, March 25.

During last week’s regularly scheduled board meeting, the Water Rate Study that Greg Spencer presented to the City of Gleason from MTAS, was discussed.

Dana Deem, who is also with MTAS, spoke to the board regarding possible consequences if action was not taken by the board regarding water and sewer rates.

“Under state law you can lose money for two years and at that point you come under the authority of the Water Wastewater Finance Board that’s where you guys are today and I think part of that is wrapped up in your audits getting behind and you didn’t realize this was going on,” Deem stated.

“I will say the state has the authority to force you to comply if you don’t agree with
the rate study. You can implement part of it, you can implement all of it, but you have to be on a plan to get back to solvency or they will force you to comply. The state will not allow you to operate a utility at a loss,” Deem said.

According to Deem, in a worst-case scenario situation, the state has the authority to force Gleason to fund a feasibility study where another utility would take over the operations.

The reasoning behind Gleason getting to the situation they are stuck in is due to multiple factors including inflation, late audits, changed accounting formula, not raising rates in the past and financial stress.

“I believe they’re willing to work with you as long as you have a plan moving forward to get back to being in the black,” Deem stated.

A motion was made to table the situation for a second time.

During the special called meeting, Nate Fontenot with the TN State Comptroller’s Office who serves as staff to the Tennessee Board of Utility Regulation as West Tennessee’s Utility Analyst spoke to the board regarding the resolution to raise the city’s sewer and water rates.

“Gleason is one of our longest cases under the board, for sure. And it’s definitely reaching a concerning point where there doesn’t seem to be any changes in the trajectory of the town’s utility system,” Fontenot stated.

The alderman, with the exception of one not present, Wade Cook, who also serves as a County Commissioner, were against raising the rates and spoke at length on the issue stating that they were against it, but knew that the State was, essentially, forcing their hands on the matter. Alderman Tommy Hodges even asked if the state would be okay with only raising the rates by a smaller percentage to which Fontenot replied that the state was not going to be happy with anything that wasn’t in the Water Rate Study done prior which stated that the rates would have to be raised 33% with removing the $5.00 maintenance fee or 25% without taking away the fee.

Fontenot stated that if the issue were not resolved that he would write up a letter to the Attorney Generals office and it would be up to them to decide what happened next.

The board voted 3-1 to raise the rates to 33% with Alderman Mike Bennett voting no.

Moving forward, Fontenot recommended that water and sewer rates be raised yearly to avoid the hiccup that the city is currently experiencing.

During new business at the regularly scheduled board meeting, Gleason Mayor Charles Anderson stated that the city had two resolutions to pass, one of them to submit a grant proposal for a community building lot grant which would be used for park improvements according to Anderson.

“This grant will be for improvements to our parks, hopefully which will include LED lights for all four ball fields, additional parking and paving, permanent stage playground equipment, and maybe a pickleball court,” Anderson said.

The city would be responsible for a 19% match with funds coming out of the ARP funds not yet spent. The Gleason aldermen felt that, with the water and sewer issues, that the grant was a luxury item.

“We have another grant in process, it’s called a DRA grant, and what it would do would be funding water infrastructure, which, hopefully, if we could land this grant, would be a significant part of our water tank infrastructure, repairs, painting and so forth.

So, that’s in the preliminary stages, I can’t count on that yet, but if we could swing that and get that grant, we could take the $5 maintenance fee off, but I’m not ready to declare that” Anderson said. The grant failed to pass for lack of a motion.

The next resolution was for the Downtown Revitalization Commission that is pursuing the Tennessee Main Street Program which comes at no cost to the city.

This includes storefronts, sidewalks, and general improvements downtown. “This resolution just signifies that the city officials endorse improvements for a downtown area,” Anderson stated.

A motion was made, and the resolution carried unanimously.

During the special called meeting, the resolution for the park grant was brought up again with Anderson explaining that the city had the funds available to cover the 19% match in ARP funds. The board did not make a motion to move forward with the resolution.

The next regularly scheduled board meeting will be Monday April 15 at 7 p.m.

 

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